With two newspapers closing each week in the US, what stops the collapse?
Publishers are falling out with ads. This is where they are turning to for revenue
The first two items today are very closely related, and the common thread is this: Publishers are seeking additional revenue streams than advertising. The softness in ad revenue is driving layoffs at digital and traditional publishers - particularly with digital publishers such as BuzzFeed, G/O Media and Vice. But it has also hit publishers like the Washington Post, which has seen issues with its subscription and ad revenue.
Digiday is reporting that companies are leaning into events and not just traditional conferences but experiences as well. Broadly, publishers are trying to find ways to increase ARPU so that they can reach sustainability from a smaller but more engaged audience. We are seeing this at all scales of media, from small local newsletter-led players to larger publishers.
Many publishers and publishing startups have leaned into reader revenue. It has given major publishers like the New York Times a solid foundation to build their business on, buoyed publishers like The Guardian and given startups like Defector Media the basis for a sustainable business.
FT Strategies direct Lisa MacLeod has some straight talk and a strong call to action in this piece.
It is this trust and leadership from editors that will ultimately make the difference in the long-term fortunes of news organisations. Print is and will remain a premium product with a definitive market niche. But to ignore the commercial realities – and digital opportunities – of our industry is to be no better than the band leader on the Titanic.
Lisa MacLeod, director FT Strategies
We’re in a pivotal moment in digital media, and you only have to look at the decline of Tumblr. Automattic, the parent company of WordPress, bought Tumblr from Verizon for $3m in 2019, which was pennies compared to the $1bn that Yahoo paid for the quirky blogging site. Keeping to the theme of the decline in ads, Automattic CEO Matt Mullenweg said that most of the ads on the site are programmatic. And sadly, only 0.2% of Tumblr users were subscribers. If they could get that up even to 10% the site would be fine. Increasing subscriptions seems like the most promising opportunity for Tumblr.
An important effort with core principles that should share wide backing:
Ethics must govern technological choices within the media;
Human agency must remain central in editorial decisions;
The media must help society to distinguish between authentic and synthetic content with confidence;
The media must participate in global AI governance and defend the viability of journalism when negotiating with tech companies.
Publishers need to reconsider their lack of investment in digital distribution
Greg Piechota challenges some long-held beliefs about the economics of digital distribution in a call for publishers to invest more in it. As he says, the cost of digital distribution is lower than print, but it’s not zero. Publisher’s reliance on organic - read free - distribution via search and social meant distorted (my words, not Greg’s) publishers’ expectations of what it cost to reach digital audiences. And I would add that it distorted the true value of these rented audiences. The value of audiences who have a direct relationship with a publisher is higher than those rented audiences. But Greg is making a broader point than simply converting unknown, loosely connected audiences to known contacts. He is also saying that publishers need to invest in their products, and they need to invest in distribution. After all, as he points out, Google paid as much as $10bn a year to be the default search engine on Apple’s devices. The bottom line is that free traffic is gone - if it ever existed - and publishers will need to invest in distribution if they want to survive.
I attended the Audiencers Festival in London a few weeks back, and a session on newsletters drove the point home once again on how valuable they are in engaging audiences, which leads to conversion and retention. The Telegraph has found “if a reader subscribes to their premium product after clicking on a newsletter, they’re 50% more likely to still be a subscriber after 12 months”, Maire Bonheim, Head of Newsletters at The Telegraph, said. It’s great to see data that proves the importance of newsletters to retention.
Questions have always swirled around newsletters with a view that younger audiences don’t read email, and this was raised at the Audiencers Festival. The durability of email newsletters has surprised me, and if anything, newsletters have come into their own as standalone products as well as parts of a modern media product portfolio.
As far as a standalone product, newsletters have proven themselves as the minimum viable local news product. Instead of a network of local news sites, we are seeing more networks of local newsletters. Michael MacLeod, Founder of The Edinburgh Guardian, talked about his experience launching the newsletter, which aggregates local news in Edinburgh. And retention was a major theme again. Only 5% who have subscribed have unsubscribed.
They have found a tremendous amount of engagement - not just views but also messages. Moreover, most of the users are local to the publication so not just audiences from elsewhere but actually in the US state that they cover.
This was big news in the UK Wednesday with the largest local news publisher - Reach - cutting 10% of their workforce. Their social-reliant traffic acquisition model has led to major issues with their digital traffic, leading to a 16% decline in their digital revenue. Having worked as a consultant with Reach for almost three years 2016 to 2018, this news is heart-breaking and hit a number of people I know.
The media industry continues to reduce its reliance on advertising, and Footballco, a footie-focused media business, is looking to grow its affiliate revenue this year. The only question that I have about putting their eggs in this basket is the impact that changes in search referrals might have to affiliate sales.
I have taken to saying that I rotate days using one of the new social media platforms. Hey, it is Tuesday, it must be Bluesky Day. I am happy to hear that I am not alone in feeling a little adrift when it comes to social media platforms. I am in four or five Slacks. I am on Bluesky, Threads and Mastodon, although I haven’t logged into the latter anytime recently more because I struggle to. And I’m still on X, Facebook, Instagram and Flickr. Ugh, too much. Too much.
I post this only because it shows how the New York Times is progressing in its work on bundles. They hit 10m subscriptions a year ago, but this is 10m subscribers.
The death of a pioneer Philip Meyer might be called the Father of Data Journalism, but I think he would want to be remembered as the Father of Precision Journalism. He brought rigour and social science to his journalism and championed that application. For me, it was this data-driven interrogation of a story that was and still is revolutionary. This contribution cannot be underestimated.
I am adding this as someone who developed an incredible appreciation for management during my master’s degree. This is one to read and reflect on. Every manager faces fear, but then there is a question of what a manager does with that. This research indicates that some managers are not managing their own emotions. Not only are their employees paying for it, but their businesses are as well.
How Advance Local is using data and segmentation to improve subscriber acquisition
Conversion techniques are constantly being refined and getting more sophisticated, and data is at its core. In this example, newspaper publisher Advance Local is using data to understand the propensity to subscribe, or readiness as they define it. It makes a lot of logical sense that a loosely engaged user isn’t the likeliest to buy a subscription. Advance Local is using this data to refine its conversion strategy and its trial offerings. Most publishers are using a registration step, but Advance Local is instead using trial subs for the first step on its subscription journey. The case study also brings us back to one of the common themes of this newsletter, engagement. For those with infrequent engagement, they have been testing a day pass offering.
Nieman Lab offers up a good overview of how news outlets from around the world are using WhatsApp Channels feature - the US, UK, Argentina and India. They are seeing fast growth, solid engagement and even referrals back to their websites.
Coverage has focused on how traffic from social media, especially Facebook, to news sites has collapsed. Charlie Warzel has a different explanation.
Consuming news might always have exacted an emotional toll, but by 2020, the experience of picking through the wreckage of social media to find out about the world was particularly awful. It’s telling that during the darkest days of the coronavirus pandemic, the very act of reading the news was rebranded as “doomscrolling,” and people have long called Twitter a “hellsite.”
Charlie Warzel, The Atlantic
He sees news fatigue as something that was created not just by events but also the toxicity of news consumption through social media.
The Press Gazette in the UK reviews traffic trends amongst local newspaper sites in the country. What is interesting is how Reach’s largest sites grew but many of their other sites saw traffic declines.
Press Foward is the foundation funded project that hopes to stem the collapse of local journalism in the United States, and they are not wasting time. This is an example of the type of projects that they are funding, local journalism projects in Chicago.
Hunterbrook, a hedge fund, is going to pay for journalism that helps it identify investing opportunities. Well, at least it is more productive than some of the investments that other funds are making in buying up journalism outlets.
Publishers are challenging the idea that scrapping content without permission for the purpose of LLM training is fair use, and the News/Media Alliance has called for an end to unauthorised use of publishers’ content. While I see a lot of potential for AI, I think there has to be a clear value exchange for content creators.
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Elle UK’s community strategy creates premium subscription product
Community is a resurgence in terms of media. Whether it’s membership schemes or other strategies that include experiences, media outlets including Hearst and DC Thomson are both announcing their pivot to community. From a business standpoint, it makes a lot of sense because the community plays often include premium tiers that allow publishers to increase ARPU. That is definitely the case with Elle UK in which their membership scheme is £110 more than the basic subscription.
But I understand the repacking of media as a community play. I think that a sense of belonging is one of the things in short supply following the pandemic. People are hungry for social experiences and a sense of connection.
Essentially we are giving them access to the daily joys that we experience every day as an Elle editor. They are getting the opportunity to experience what we do every day. So we try the beauty products first, we go into the exhibitions, we go see the films, we go on the trips, we have these amazing opportunities to engage with thought leaders, women who are driving the discussions that are dominating our group chats, women who are sitting at the centre of fashion, beauty and culture.
Kenya Hunt, editor of Elle UK
One of the major themes in media over the past year has been the collapse in traffic from social media to publishers’ properties. The Verge conducted a rather radical redesign in part to lure more audiences directly to their site as traffic from Twitter dried up. The Verge has seen readership increase by 15% in part because of a dramatic, 62% rise in its loyal readership. This article is thing on details, but the tech publisher has been to convert casual readers into more loyal audience members.
Product management is first and foremost a coordinating function. Product managers work across organisations to bring stakeholders into alignment from editorial, commercial and technical teams. Communication is key, and as I found in my master’s degree, product managers are able to translate across these teams.
First, major foundations in the US announced a huge half billion dollar fund to try to address the crisis in local journalism there. They always said that this was a down payment that they hoped would act like seed money for more investment. And now, they have made that goal explicit.
Creators on social media are finding success in providing news on social media. Their followers find their recommendations more relevant than traditional media.
Apart from triple digital growth from Ilife Media’s Kent Online, Reach’s network of ‘live’ regional news website dominated the top 10. Reach’s large sites such as the Manchester Evening News, Birmingham Live and the Liverpool Echo stood at the top of the list. However, not all of the news was good for Reach. If its 31 titles, all but seven lost audience.
By distributing new shows through existing feeds, it helps leverage existing show followings to give new offerings a boost.
Maybe this is my adverse reaction to Natty Geo laying off all of its writers, but this feels like a strategy from the Platform Era. Followers and social media impressions are one thing, but as we have seen, that doesn’t necessarily translate into revenue and sustainable media businesses.
The Engagement Special: How Der Spiegel developed its engagement metric
There are playbooks and then there recipes for success. This is one of the most detailed articles that I have seen in terms of how a publisher has developed their analytics. Der Spiegel walks you through how they evolved the RFV - recency, frequency, volume - metric that was developed at the Financial Times. They also added regularity, and for good reason. The Spiegel Research Center at Northwestern University has shown how regularity is more highly correlated to conversion and retention than dwell time and the volume of content that a user consumes. It is why I stress loyalty and habit that drives known users as keys to building a sustainable media business.
But Der Spiegel adds another important element - empirical cumulative distribution function. “ECDF transforms numerical data, indicating the proportion of values that are less than or equal to a specific value.” It is some powerful data science that they are deploying, and they connect these audience metrics with their business metrics.
And in our second case study, WAN-IFRA looks at how The Conversation is building engagement and donations to add to the university funding that they receive. Analytics is helping them develop new content products such as their Quarter Life series, content that is focused on young professionals. The success of the the series has led them to other audience engagement efforts including quizzes and newsletters. And the next step in their development is in-person events.
These engagement efforts to build direct relationships with audiences are key as traffic drivers like search and social decline. That has been one of the major themes this year, but now, Digiday has evidence that traffic from news aggregators is also on the decline. That decline in traffic and the emphasis on first-party data has media leaders reassessing their relationship with aggregators.
From INMA, we have an overview of two mindsets that determine whether a company develops the agility to embrace innovation. The second mindset is often referred to as “fail fast” in Silicon Valley culture. I prefer to frame it as “learn quickly”. Or as the piece says: “Encourage a culture where failure is not a dirty word but an opportunity for learning and growth.”
Speculation grows as to who might acquire The Telegraph and Spectator in the UK. Germany’s Axel Springer has become a major global media player, but it has cast doubt about whether they will pursue a bid for the British newspaper. They want to focus on a digital-only strategy.
Meta’s Twitter-competitor, Thread, enjoyed a huge burst of growth when it launched because of its integration with Instagram, but then use tailed off. As they develop the product, use seems to have rebounded, and now they are talking about launching an API. The head of Instagram says that they will develop it even if it means more publisher content as opposed to creator content. I guess that shows where their priorities are.
Thus far, there have been limited use of AI to generate deepfakes during the Israel-Hamas War, but what little has been created has only created more mistrust of traditional media. How depressing.
Copy this: The FT’s newsletter development and launch playbook
In an excellent product management case study, Sarah Ebner of the FT writes about the development of its fashion newsletter, which has become the most opened newsletter in its stable. Ebner has a newsletter pitch document to ensure that the propositions are well thought out, and the FT did market research to ensure there was demand for it. She also went through her launch strategy, which made sure that the newsletter enjoyed healthy growth. It’s a solid playbook.
In another practical piece, Peter Bale reviews how The Independent measures engagement. It allows them to give every user a score, and it is relatively easy to calculate. As Peter says, the metric allows the news site to measure both the propensity to register and subscribe while also optimising advertising yield.
As a business school graduate, this brought back memories of the strategic management course. The Fix has an excellent rundown of major management frameworks such as PEST, Porter’s Five Forces and value-chain analysis and also a quick overview of resource-based view analysis and how to apply them to media management.
Ken Doctor has long been an important contributor to the conversation around local news sustainability, and this interview adds to his contributions to this complex effort. He says:
You cannot point to any digital news startup of scale that's trying to replace a daily newspaper that is profitable today. I can't find any. That doesn't mean they're not successful. They are meeting their missions. They are replacing the news function and information function, but they need more time.
Ken Doctor, local news analyst and entrepreneur
I think the issue he highlights is around scale. Yes, there isn’t any local, digital start-up operating at a scale that will replace the newspapers in those communities, but there are interesting start-ups that are starting to put together new models. Most of them remind me of Clay Christensen’s model of disruptive innovation. They are low-scale, low-cost operations that usually begin with a newsletter and move up the value chain from there.
In the US, philanthropic launch money is there, but he says that it will take time to rebuild the lost journalism capacity that was once there.
Just as there is a lot to learn from the FT’s newsletter playbook, for those working in the verification space, there are a lot of lessons in this post. The first is to be sceptical and curious. I did verification work for more than a decade work when I was doing some consulting with Al Jazeera, and we used online research and technical means, such as looking at the EXIF data. Now, the verification methods are much more sophisticated because the techniques for misinformation disinformation are much more sophisticated.
One of the stories making the rounds this week was how The Messenger was starting to circle the drain. It was launched by The Hill owner Jimmy Finkelstein, but for anyone working in digital media over the past decade, the entire premise sounded very unlikely to work. The audience development goals and plans were grounded in the market more than a decade ago in which social media could deliver tremendous scale. The editorial strategy and poor management alienated staff almost immediately. This comes from Techdirt so expect it to be full of snark.
AI this week: Gannett accused of using AI to generate reviews, more AI coming to Facebook
Unionised workers at Gannett’s review site have accused the parent company of using AI to generate reviews after they walked off the job on a busy shopping day earlier this year. It now looks like the reviews came from a marketing agency, which has been used by both Gannett and McClatchy. But the question still remains of whether the marketing firm used AI to generate these really quite poor quality reviews.
I am seeing AI everywhere. We use Hubspot at work to send out our newsletter, and they have AI writing tools included. They aren’t too bad, and I have been using it to root out some bad writing habits that have developed over time.
Meta is bringing AI tools to profile pics and post writing. Is this like the moment when calculators became widespread and students started using them in math classes? Something to ponder on the weekend.
Betteridge’s rules for surviving the coming collapse of search
Ian Betteridge, he of Betteridge’s Law of Headlines, has some very timely advice for publishers on how they can handle the end of SEO (see below for why this is important). Google is constantly tweaking its algorithms, and the third major update this year has hit some news site hard. Ian is taking a long view and offering up some solid advice on how to manage not just the collapse of SEO but the arrival of SGE - search generartive experience - in which search becomes the destination and the infinite source of answers. It might be good for users and lazy students, but it could be incredibly damaging for publishers.
Ian is right that publishers need to prepare for this future becasue it isn’t that far away. I am in violent agreement that publishers need to focus on direct relationships and not just traffic. Research is full of data points that show that building up a loyal audience that has developed a habit of coming directly to your site is really the way forward. You can achieve that through newsletters, podcasts and apps, with their powerful push notifications. Leaning into newsletters still makes heaps of sense, and I also agree that AI-generated content will not save publishers from the coming collapse of search. AI can help surface content that is more relevant to individual users, and that can help build that loyalty and habit. But that is an entirely different use case. Read on, there is a lot in his post.
Oh, that is why your traffic from search has dropped. It’s another data point in the theme of this year, which is the end of the Platform Era. This isn’t a huge structural change but simply the every so often algorithm update that whacks traffic from search. It really is just an extension of what Google has been doing. The key issues are really around ‘helpful content’, and I think that this is part of their ongoing cat-and-mouse game with content farms that churn out low-grade content. And I wonder if this will work to keep them from surfacing too much low-grade, AI-mass-produced garbage. One can hope. The moral of this story is that helpful, original content wins..
Off the back of news that the New York Times is considering raising its subscription price, Thomas Baekdal looks at when publishers should consider hiking their rates. The simple answer is when you have a mature business and not before. I think that subscription businesses like the New York Times and Netflix, which Thomas also references, are more than just mature businesses, they are - in the words of the Reuters Institute Digital News report, the winners who take most in the subscription economy. Others do not enjoy the same pricing power. But that is effectively what Thomas is saying.
This one goes in my bookmarks because measuring impact is one of those challenging goals that many publishers have. It’s important to motivating their staff, and for the increasing number of publishers that get some of their money from foundations and other sources of philanthropy, measuring impact is an important.
This is an interestig move from a major group in the US that has been a powerful incubator for local indie news publishers. They are not going to become a funder but rather help their members to fundraise. It’s super smart, exactly what I expect from their leader Chris Krewson.
The Manchester Mill, a newsletter-first publisher in the UK, is expanding. It is another example of why the humble newsletter is the MVP of local news start-ups these days.
This move by podcast shop Wondery fascinates me on a couple of points. Some podcasters have found tremendous success on YouTube so the lines are blurring between audio and video. For Wondery now to launch podcasts on a FAST (Free Ad-supported Streaming TV) platform - Amazon’s Freevee - seems to lean into this trend. We’ll see how successful it is.
EX-Twitter’s ‘bot tax’ will fackfire and X as a rebranding exercise has failed
Musk has been obsessed with bots on Twitter since before he bought it, and while it makes sense to try to reduce them, a good piece on The Conversation explains why the new USD1 fee won’t help the company with revenue and won’t reduce the issue with bots. One suggestion Steven Vass, The Conversation’s business and economics editor, has is to increase human moderation. But Musk blew up the moderation and safety teams at Twitter so it’s unlikely he will be open to that suggestion.
And while Musk hoped to turn the page with Twitter by rebranding it with his favourite brand - X - this seems only to have hastened its decline.
The platform era is over. What comes next?
The platform era is over. The statement has so much supporting evidence that the idea is now beyond dispute. A decade ago, a lot of energy was focused on how to use social media algorithms to send torrents of traffic to your site. But let’s be honest, it wasn’t that this led to a healthy, revenue-positive business. It just juiced the traffic to both legacy sites and a raft of businesses targeting Millennial audiences of various stripes. The digital media start-ups often had rocket boosters in the form of VC funding, and many of them were never revenue-positive. The entire strategy was to become the media empires of the 21st Century, but like so much in media in the 21st Century, this was really a roll-up play. You got big and bought up the smaller, often weaker competitors.
The New York Times is a bit late to the party in writing about this, and I think that they focus on the news industry because it is the anxiety that grips their staff (and shouldn’t). Publishers like the Times began building direct relationships with audiences more than a decade ago with their metered paywall. It’s worked brilliantly, and you could argue that they are now one of the winners of the digital media era, much more so than BuzzFeed, which shuttered its news division because of the brand dissonance between news and aggregating what obsessed the internet on any given day for social media audiences and a lack of a business model for that content.
Not that the collapse of social media traffic and search to a lesser extent doesn’t have negative consequences for the Times and other reader revenue-driven businesses. They need to think about new methods of audience acquisition, but at least they have a solid business that they can build on.
It brings me little joy to highlight not just this story but the wider trend of digital media properties that were built to cater to Millennial women are in trouble. The pioneering feminist site Jezebel is up for sale. Axios highlights how this is part of a larger trend and lists all of the other sites and media properties in that space that are suffering as well.
I especially note the decline of The Skimm, which is a really smart newsletter property that I used to highlight in presentations seven or eight years ago. I think they missed an inflection point around that time. Honestly, they were Axios before it was launched - smart brevity.
However, the end of the platform doesn’t mean that this will end the pain for local news operations. Despite moving out of the newsroom in 2019 and to a media-adjacent software company in 2022, my roots are in local news, and I still think about how to solve its problems. I think that we are seeing a new on-ramp for local news micro-start-ups: the humble newsletter. It has become the MVP - minimum viable product - for a local news startup. More than social, more than a site, having a newsletter is the core MVP for someone looking to create a new, local news outlet.
However, I also like to see new policy solutions to the problem. Washington DC - where I lived on and off for almost eight years - is doing something novel: It is creating a fund that will allow its residents to support the local news outlet of their choice. It will be interesting to see how they define a local news outlet and how they will enforce the use of the vouchers, but it is interesting.
And if newsletters are the MVP, we see successful newsletter operators looking for what comes next. The folks at Inbox Collective highlight ways in which newsletters writers are adding products that extend the connection that they have with audiences with private, premium communities on Slack or Discord. As someone who worked in community media and then bringing community to larger media brands, I find this trend fascinating. It’s not a fast or easy play but for established media creators and brands, it can be an extension to deepen the relationship and hopefully increase revenue.
This is a great story from journalism.co.uk on how a Zimbabwean journalist grew to understand the business side of journalism and has been able to achieve successful digital transformation. I like the piece because it applies not only to large media businesses but can be applied at just about any scale.
And from the US, we have a few examples of how local news entrepreneurs are launching new ventures. I think that small-scale local news outlets will serve a lot of communities where the major chains and groups have retreated.
I know that there are a lot of people out there trying to get ahead in media, and these five steps are solid. I will highlight one of the five skills because it took me a while to appreciate the power of soft skills. When you’re starting in media, you are rewarded for your hard skills, but you won’t rise through the ranks by mastering those hard skills alone. And for a lot of people, that’s OK. However, if you want to rise to management, you also need to master soft skills.
Navigating the pros and cons of AI in editorial organisations
A thoughtful piece to reflect on during the weekend. Of the insights, managing and navigating trade-offs is one that really resonates with me. There are rarely perfect solutions in life, and it’s important to measure, weight and consider the pros and cons of any decision.
From the theoretical and managerial to the tangible, The Fix looks at how newsrooms are developing AI guidelines. When I was a journalist and then editorial leader, I often said that I was a traditional journalist who used cutting-edge digital tools. That meant that my decisions were always grounded in core journalistic values. They provided me with principles to assess the trade-offs of new technologies in my work.
This week in Twitter: New subscription plans coming
Musk has always said that he wants to build Twitter into a super-app. Here is the problem with what he is doing with his new subscription plans: He’s trying to charge for activities in the app that have been free up to this point such as commenting, bookmarking and posting. And subscription products shouldn’t be used to manage abuse on a platform - Musk’s obsession with bots. He should use some of that technical brilliance that his fanboys constantly talk about. Sure, it’s just a $1 annual fee, but it feels like a really bad, desperate way to fight bots.
The response has been uniformly negative. It’s a bad idea along with a lot of the other bad ideas. Musk definitely seems to be living the Silicon Valley mantra of “move fast and break things”. He has succeeded in breaking a social media brand. That much is sure. /
